Which statement accurately describes the role of fiscal residence?

The correct statement highlights that fiscal residence is crucial in determining tax obligations for both individuals and companies. Fiscal residence refers to the criteria used to establish where a person or entity is considered to be a tax resident. This status can significantly influence the tax liabilities of individuals and businesses, as it typically dictates where they must pay taxes on their income, gains, and other financial transactions.

For individuals, the place of fiscal residence often determines their tax rates and the income that is taxable. Similarly, for companies, fiscal residence affects where corporate tax is owed and which country's laws govern their taxation. Thus, understanding fiscal residence is essential for compliance with tax laws and planning for tax liabilities.

The other choices fail to capture the comprehensive nature of fiscal residence. The first option incorrectly limits the concept to individuals, disregarding its application to corporations. The second option mistakenly states that fiscal residence is irrelevant for tax purposes, when, in fact, it is a foundational element in establishing tax obligations. The last option limits fiscal residence to businesses, ignoring its significance for individual taxpayers as well.